Tag Archive | "F&I"

F&I Performance Down in 2009, NADA Reports


The recession’s effects on the industry last year wasn’t lost on F&I, according to the National Automobile Dealers Association’s DATA report, which showed declines in aftermarket income, F&I and service-contract acceptance rates.

Aftermarket income (combined gross from F&I and service contracts) fell to 25.7 percent of new- and used-vehicle department gross profit in 2009, down from nearly 30 percent in 2008 “as customers economized during the deepening recession,” the report stated.

F&I and service-contract penetration rates fell for new and used vehicles combined, as financing became difficult for customers with credit rated “Alt-A” and below.

Service-contract penetration for new vehicles held share at 32.4 percent in 2009, far from the relative peaks of 35 percent in 1986 and 34 percent in 2004.

On a positive note, 2009 did show some improvements from the previous year.

Gross profit margin on new-vehicle sales was 4.5 percent of the selling price in 2009, up from 4.4 percent in 2008 when gas prices were volatile.

Last year also saw a year-over-year improvement in new-vehicle F&I penetration, which stood at 55.7 percent in 2009.

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UDS Launches F&I Webinar Series for Dealer Partners


CLEARWATER, Fla. – United Development Systems, Inc. (UDS) has launched the UDS Webinar Series – aimed at bringing its award-winning F&I Training directly to its partners.

“Our promise to our dealer partners is monthly training on various F&I related topics,” said Randy Crisorio, UDS president and CEO. “Using webinar technology will allow us to more conveniently and consistently deliver on that promise to present quality F&I training solutions.”

The UDS Webinar Series will consist of monthly online sessions covering a variety of F&I-related topics. Planned topics will range from The F&I Interview Process, to Lender Relations, Compliance, and AutoMenu(TM) Selling Strategies.

Each webinar will last 60 minutes or less, enabling even the busiest of managers an opportunity to login and participate. Additionally, UDS dealer partners will have unlimited access to archived sessions via its websites’ partner portal.

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Zurich Enhances F&I Product Offerings with Zurich Shield Windshield Protection


SCHAUMBURG, Ill. – Automobile dealers can now offer their customers a full array of finance and insurance (F&I) products from Zurich, a provider of F&I products for automotive businesses in the United States, with the release of Zurich’s new F&I product – Zurich ShieldTM Windshield Protection.

According to Tina Mallie, head of Direct Markets for Zurich’s North America Commercial business, current research shows new-vehicle buyers are holding on to their cars and trucks for longer periods, making quality F&I products like Zurich ShieldTM an even more valuable profit-generator for automobile dealers’ than ever before.

Zurich ShieldTM Windshield Protection is an addition to the already popular Zurich ShieldTM Environmental Protection product, which was designed to protect the interior and exterior of a vehicle from harmful elements, road grime, stains and normal wear and tear.

Mallie said, “Another selling point for automobile dealers to share with their customers is how Zurich’s F&I products can also increase the resale value of a vehicle by providing a defense mechanism against exterior and interior damage.”

Zurich also offers automobile, truck and powersport dealers the following F&I products:

  • Vehicle service contracts
  • Certified vehicle program
  • Maintenance program
  • Road hazard tire & wheel
  • Guaranteed Auto Protection (GAP)
  • Universal Security Guard® theft-deterrent system

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JM&A May Buy F&I Companies to Grow in West


Financial services giant JM&A Group, a powerhouse in the Southeast, is aiming to grow in the rest of the United States. The main target for expansion is the West, and JM&A executives say they will consider purchasing smaller providers to pick up share in the finance and insurance market, reported Automotive News. But executives also have expanded the sales team and increased marketing and incentive budgets to help pitch JM&A’s services to large dealership groups west of the Mississippi.

That market is largely untapped by JM&A, a unit of JM Family Enterprises, the Deerfield Beach, Fla., company founded by Jim Moran. The F&I unit got its start 32 years ago acting as a captive finance company for Toyota dealerships in Florida, Georgia, Alabama and the Carolinas that were serviced by JM’s Southeast Toyota, exclusive distributor of Toyota and Lexus vehicles in that corner of the country.

“We have a 30 percent market share in the Southeast, and there is no reason we couldn’t achieve the same market share over time across the country,” said Colin Brown, CEO of JM Family Enterprises. “There is a lot of growth out there” even if industry volumes don’t come back, he said.

That share — or penetration rate — means JM&A sells at least one product on three of every 10 new and used vehicles sold in the Southeast. On the East Coast, penetration is 8 percent. It’s 6.6 percent in the West and even lower in major Western states such as California and Nevada.

“As we get beyond where we started, the opportunity tends to really stick out,” said Forrest Heathcott, president of JM&A. “Those are some pretty key markets where there’s a lot of population.”

In the next five years, JM&A intends to boost penetration in the West to 10 percent, Heathcott said. He said it could take 15 years to match the 30 percent share of the Southeast.

“These are big decisions for dealers to make, and they don’t come quickly,” Heathcott said.

To accelerate the expansion, JM&A has “budgeted for some very thoughtful, formidable acquisitions,” Heathcott said. He wouldn’t share numbers but said JM&A already is in discussions with independent agencies and smaller insurance companies.

Heathcott said JM&A increased its marketing and incentive budgets about 25 percent each this year. Incentives typically include dealer rewards or trips.

Growth by acquisition would be a first for JM&A, Heathcott said. The acquisition target area includes California, Washington, Oregon, Arizona, Texas, Oklahoma and Colorado.

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Consumer Advocacy Product Introduced to Dealer Market at NIADA


LAS VEGAS – Repair Assurance, a new F&I product introduced at the NIADA convention, is a vehicle service agreement that offers different consumer benefits and fresh opportunities for dealers. Consumers receive representation when dealing with auto repair facilities and warranty companies.

Consumers who purchase plans of coverage, ranging from one to five years, have a dedicated Repair Assurance repair adviser that will fully negotiate with a repair facility or warranty company all aspects of any repair or maintenance service.

The Repair Assurance adviser ensures that the correct repair is being done at the correct price and at the correct time. This service is unlimited and consumers can contact their adviser as many times as they wish to ask questions or get advice on any auto repair or maintenance issues.

Repair facilities can also call Repair Assurance directly before beginning a repair to work with a customer’s adviser directly. The adviser steps in to negotiate the entire repair on the customer’s behalf.

In addition to the advocacy service, Repair Assurance offers a complete spectrum of ancillary service agreement benefits such as towing, fuel and fluid delivery, lost key & lockout, flat tire and extrication services. Additional discounts are provided on rental vehicles.

Repair Assurance was conceived and developed by Tom Cullen and his partner Tony Fiorillo of Vision Marketing Group, based in West St. Paul, Minn. Cullen said the idea for this product came to him after witnessing the downsizing of a highly respected service contract administrator in Omaha, Neb.

“I thought it was a waste of talent to let all those experienced claims people go,” Cullen said. “Then it occurred to me that if they could adjudicate claims and work with repair shops to defend the insurance company, why not defend the consumer?”

Cullen added that Repair Assurance is a complementary product for the F&I office because it is priced lower than a service contract and can be used by the F&I manager as an alternative when the customer refuses a VSC due to price or payments concerns. It also is designed to increase service department retention by directing the consumer back to the selling dealership to get work done on their vehicle, especially with used vehicles.

Tony Fiorillo said he is excited about the quality service they can offer dealers and consumers.

“We feel fortunate to have a wealth of talent to bring into the company for consumers to turn to. The people we’re hiring have years of automotive experience and expertise in dealing with repair facilities from independent shops right up to OEM factory representatives. This product can really help dealers improve their CSI because now consumers feel the dealership is sending a repair advocate out with them when they drive off the lot.”

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Creating an Implementation Plan for Improved Performance


Do you have an image of your dealer’s potential that your dealer never seems quite able to achieve? Are you having performance issues at stores where they pay little or no attention to your recommendation? When was the last time you visited a store after discussing a specific procedure, policy or process only to find nothing has changed?

I’m sure all of your dealers and their employees hear what you’re saying, but do they actually understand and recognize the benefit? Are they able to translate your words into actions?

To significantly affect change, what may be needed is a different way to communicate your intentions and explain the benefits. A method of communication that places more emphasis on what it takes to get there, recognizes the advantages and holds people accountable to follow through.

Too often we rely on the speculation that the dealer and his employees can distinguish a positive change from a negative change. Successful implementation of certain process, procedure and performance improvements involves a steadfast plan that communicates the objective in terms of detailed actions or operations. It should state specifically what tasks need to be completed, in what order they need to be completed and the timeline in which they need to be completed. Certain individuals should be appointed to perform the tasks while providing them with the training, resources and the support to complete the objective.

Most important to sustaining the process, procedure or performance improvement is the monitoring and measuring of its progress and the impact it is having on the dealership’s proficiency.

Any time you want to implement a new program, process, procedure or enhance a store’s or individual’s performance, follow these steps and reap the rewards:

IDENTIFY: What is the program, process or procedure that needs to be implemented or reinstated? What area or level of performance needs improvement?

Be precise in identifying the objective. Don’t just say “we need 100 percent turnover at point of sale.” Instead, say “we need a proper 100 percent turnover at point of sale regardless of the circumstances. It doesn’t matter whether the customer agrees to buy over the Internet, phone or is here at the dealership.”

The key words being proper and regardless of the circumstances need to be explained by pointing out exactly what is meant by proper and what steps need to be done after each buying scenario.

DETAIL: What steps are needed to accomplish the desired results? Take a sheet of paper and write down every step that is significant to complete the objective. Write down the name of every individual who has a role in its success. Review the tasks and prioritize them as to their importance.

Now, list the tasks in a progression suitable for obtaining the desired results. For the initial task, a meeting needs to be facilitated with all the individuals listed as having a role in attendance. The meeting’s agenda must describe in detail the program, process, procedure or level of performance that needs to be implemented or improved. If the objective is related to individual performance, then a one-on-one meeting will need to take place itemizing each task pertinent to the individual’s performance improvement target.

The following steps detail how the “role-out” meeting should be conducted. When followed, these steps show a sense of urgency and emphasize the importance of implementing a plan of action.

  1. What is it that you want the meeting to accomplish? Establish specific objectives for the meeting.
  2. Prepare a topic-by-topic agenda of what is to be discussed, and note how much time will be allocated for each topic. Allow for a bit of slack time.
  3. Prepare a list of attendees. It is vital that the “captain of the ship” be present at the meeting. Be sure everyone on your list is available when you want to schedule the meeting.
  4. Send every attendee the meeting’s agenda. The agenda should include items 1-3 just discussed. Ask everyone to be prepared to take part in the meeting.
  5. Start the meeting on schedule, with a reminder that time is limited and a statement to the effect that your intention is to limit the discussion to the items on the agenda.

Your role is to be prepared and well rehearsed. At the start of the meeting politely but firmly cut off discussion by anyone who departs from the agenda. Don’t let one person with off-the-wall questions tie up the meeting. Deal with that person privately after the meeting is over. End the meeting when you said you would. Thank the attendees for their cooperation. Prepare and circulate the action plan documenting who, as a result of the meeting, is supposed to do what and by when.

WHO: Who will be responsible for its implementation? Selecting the right personnel to carry out the tasks is critical for a successful outcome. The selected individuals must have an unyielding interest in the completion of the program, process or procedure being implemented or reinstated. Assigning a champion for the objective is great way to ensure its satisfactory completion. Someone will need to be assigned the task of monitoring and reporting progress as well.

WHEN: What is the timeline for completion? Setting a timeline for each task along with a due date detailing the completion of the intended improvement, program, process or procedure will keep you on track and help avoid distractions. By tackling the tasks one by one, it allows you to move methodically to the next task and gets you closer to completion.

MEASURMENT: How will the process or performance be measure and tracked? Who will the results be reported to? As suggested earlier, the appointment of a champion who will monitor and report the results to the “Captain of the Ship” would be a great start. Before results are calculated, performance benchmarks and standard functions need to be established. The benchmarks and functions will vary depending on the objective. For instance, implementing the process of 100 percent proper turnover at the point of sale regardless of the circumstances will require a full explanation of the standard functions to follow for each scenario once a customer agrees to buy.

The benchmark may vary in the beginning depending on the magnitude of the situation. Monitoring progress on a regular basis will help to determine the increase in the benchmark as it moves along. Such monitoring will also identify potential problem areas and provide assurance that functions are meeting the objectives.

Use this information to further adjust and optimize your plan. Failure to measure, track and hold people accountable through the utilization of reports puts the objective at risk.

Whether you’re trying to establish specific procedures, increasing product proficiency or roll out a new service contract, adhering to the five essential components will significantly increase your chance of reaching the desired result.

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